Tag: outflows

Foreign investors withdraw $244M, triggering second wave of outflows

**Foreign Investors Withdraw $244M, Triggering Second Wave of Outflows**

*By Akash Pandey | Sep 29, 2025 11:06 AM*

Foreign investors have pulled out a staggering $244 million from India-focused funds this week, according to a recent report by Elara Capital. This marks the second major wave of redemptions since July, contributing to a total outflow of $2.3 billion. Notably, this is the largest withdrawal since the significant $4.4 billion rout that occurred between October 2023 and March 2024.

**Impact on Funds**

Large-cap funds have been hit the hardest during this selloff, with withdrawals totaling $2 billion in this phase alone. In contrast, mid- and small-cap funds have largely been spared, experiencing redemptions of roughly $20 million each.

Geographically, US-based funds led the withdrawals with $1 billion pulled out, followed by Luxembourg-based investors at $765 million and Japan at $365 million.

**Shifting Global Market Preferences**

The outflows are driven by a notable shift in global emerging market (GEM) portfolios. Allocation to India in GEM funds has dropped to 16.7%, marking its lowest level since November 2023 and down from a peak of 21% in September 2024. Meanwhile, China’s share has surged to 28.8%, indicating a clear pivot by active portfolio managers towards the Chinese market.

**Global Trends**

Despite sustained outflows from India, US equity funds attracted $10.5 billion this week. However, the pace of inflows has slowed since the Trump administration’s tariff announcement in April. Interestingly, domestic US funds experienced redemptions totaling $2.2 billion over the same period.

Precious metal funds saw record inflows of $13.5 billion, while commodity funds extended their winning streak to five consecutive weeks — the longest since 2020. Additionally, high-yield or junk bonds continued to attract steady inflows, with net asset values climbing back to levels last seen in October 2021.

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This recent wave of foreign investor exits underscores the evolving dynamics in global capital flows, especially within emerging markets, where shifting geopolitical and economic factors continue to influence investment decisions.
https://www.newsbytesapp.com/news/business/foreign-investors-pull-out-244m-from-india-focused-funds/story

FPIs pull ₹7,945cr from Indian equities, net outflows ₹1.4L crore

**FPIs Withdraw ₹7,945 Crore from Indian Equities; Net Outflows Cross ₹1.4 Lakh Crore in 2025**

*By Akash Pandey | Sep 21, 2025, 02:18 PM*

Foreign Portfolio Investors (FPIs) have pulled out ₹7,945 crore from Indian equities so far in September. This continued sell-off is largely driven by global uncertainties, including tariffs and ongoing geopolitical tensions.

The trend follows significant outflows seen in previous months, with FPIs withdrawing ₹34,990 crore in August and ₹17,700 crore in July. Overall, FPI sell-offs in Indian equities have reached a staggering ₹1.38 lakh crore in 2025, according to the latest data.

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### Looking Ahead: Signs of Moderation in Selling

Market experts are closely monitoring upcoming macroeconomic data from both India and the United States, along with tariff negotiations. These factors are poised to influence FPI flows in the near term.

Despite remaining net sellers in September with cumulative equity outflows of ₹7,945 crore through September 19, FPIs have displayed some moderation in their selling behavior recently.

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### Impact of the Fed’s Rate Cut on Market Liquidity

Following the US Federal Reserve’s decision to cut interest rates by 25 basis points, FPIs briefly turned net buyers last week, purchasing equities worth ₹900 crore during this period.

“For the current week, FPIs bought Indian equities worth ₹900 crore on the back of the Fed’s rate cut,” said Vaqarjaved Khan, Senior Fundamental Analyst at Religare Broking Ltd. He added that two more rate cuts are projected in 2025, which could significantly enhance liquidity in global markets.

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### Investor Sentiment Bolstered by Easing Trade Tensions

Himanshu Srivastava from Morningstar Investment Research India observed a “modest but noticeable return” of foreign investors to Indian equities last week. He attributed this shift to the Fed’s dovish stance, easing US-India trade frictions, and a stable macroeconomic outlook in India.

However, Srivastava cautioned that persistent global uncertainties and geopolitical risks continue to temper investor enthusiasm, keeping FPI flows cautious.

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### Market Strategy: FPIs Diversify into Debt Markets

V K Vijayakumar from Geojit Financial Services pointed out that the FPI selling trend in India has coincided with buying activity in other Asian markets such as Hong Kong, Taiwan, and South Korea. This strategy has been profitable this year but may evolve going forward.

Additionally, debt markets in India have seen FPI investment, with inflows of approximately ₹900 crore under the general limit and ₹1,100 crore through the voluntary retention route.

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**In summary, while FPIs continue to withdraw from Indian equities amid global uncertainties, recent developments such as the Fed’s rate cuts and easing trade tensions offer potential for stabilization and renewed foreign investment flows in the near future.**
https://www.newsbytesapp.com/news/business/fpis-pull-out-8-000cr-from-equities-in-september/story

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